ED FISHER: The myth of liberty and justice for all

I’ve been away for a couple of weeks but tried to keep up with the news: fires, tornados, murder, mayhem, riots, a 160-foot bridge collapsing in Skagit, Washington, and a Missouri highway overpass failing a few days later; the usual. I was amused to see that the Queen of TP Comedy, Michele Bachmann has “decided” not to run for Congress, so not all the news was bad.

During my trip, I read Joseph E. Stiglitz’s book “The Price of Inequality.” If you have not read it yet, I strongly recommend that you do. He chronicles and analyzes what has happened economically and politically to the U.S. in the last 30 years. This is not a “here he goes again” review; it is “wake up and hear the fire alarm.”

Stiglitz taught at Yale, Harvard and Stanford, and is currently a professor at Columbia. He shared the Nobel Prize in Economic Sciences in 2001 with two other economists. He is a former senior vice president and chief economist of the World Bank, and has held key positions in national and international organizations. He is one of the most frequently cited economists in the world and in 2011 was named by Time magazine as one of the 100 most influential people in the world.

He traces the difficulties we face today to the tax cuts and deregulation of banking and industry of the Reagan administration. Income taxes for the rich went from 70 percent to 28 percent. The 1981 bill also made a number of business deductions larger. Reduced taxes were partly offset by Social Security payroll tax increases. The most damaging effort was in the deregulation of large banks and business sectors.

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The top 1 percent of families receives an average annual income of over $1.3 million and has a net worth of $16.4 million. This includes top executives of large banks and corporations as well as sports and entertainment celebrities.

The top 20 percent (which includes the top 1 percent) include top ranking professionals with an annual income averaging $226,000 and a net worth of over $2 million. The next 20 percent have an income of $72,000 and a worth of over $216,000. The next 20 percent get an average of over $41,000 and have a worth of $61,000. The bottom 40 percent average $17,300 a year and have a negative net worth of $10,600.

More revealing, by 2010 the top 1 percent had 35 percent of net worth in the country, the next 19 percent owned 54 percent and the bottom 80 percent had the remaining 11 percent.

In order to acquire a job a person must be sufficiently healthy, have sufficient schooling, education, and opportunity. Over the past 30 years, health care in the U.S. has become second class when compared to other industrial nations. We pay more per capita but important measures of success such as life span, infant mortality, and preventive care are marginal.

The top 20 percent have the wealth and connections to place their children in the best schools at every level. The rest must make do and often end up with student debts that make a first job (if it is available) a form of indentured servitude. The outsourcing of jobs and technology that transforms tasks formerly done by humans and the Great Recession have reduced opportunity for many skilled and unskilled workers.

Recent income growth occurs at the top 1 percent, resulting in growing inequality. Those at the bottom 80 percent are worse off today than they were at the beginning of the century.

Inequalities in wealth are much greater than those in income. Inequalities reduce the quality of life, in areas such as insecurity and poor health. Life is difficult at the bottom, and the recession has made it worse. The middle class has been hollowed out. There is little chance of income mobility.

The U.S. has more inequality than any other advanced industrial nation and does less to correct these inequalities. That inequality is growing faster here than in many other countries. Freedom and justice for all has become a myth.

The top 1 percent has bought enough politicians to influence regulation, controls who becomes regulators (who after a stint in government return to high-paying jobs), owns enough of the media to control how news is presented (a la Faux News), make unlimited donations to influence political races, distended the financial sector to make and find every loophole in order to minimize taxes, and rewards top executives regardless of the success or failure of the company.

Stiglitz provides a glimmer of hope for change in how our society can endure. I share his gloomy outlook if changes are not made. Look to what is happening in Turkey where a majority is in revolt. Thanks to those starry-eyed do-gooders at the NRA, we all have guns, including those at the bottom.